8 Common Ways Small Businesses Waste Money Marketing
I hate seeing money lost to wasted marketing. After talking to hundreds of small business owners, I’ve discovered many inadvertently waste much of their budget on misused or ineffective tactics and tools.
Marketing budgets for small companies are already too tight, and you simply don’t have the time or finances for things that don’t work.
To help you cut waste and boost success in 2016, I’ve compiled a list of the eight most common ways small businesses lose money with bad marketing AND what you can do turn those loses into gains.
1) Using social media to build a following.
Social media is great, but too many small businesses dive in with no better strategy than to “build a following.”
You could get away with this back when Facebook reach was high, but now many small businesses are realizing they’ve invested a lot of time and effort in something they now have to pay to use. Thanks to Facebook’s constantly changing algorithm, only a tiny fraction of your followers ever see your content in their News Feeds, and small business owners are having to purchase Facebook ads to get their content seen.
How can we fix this?
The ads prices aren’t too bad right now, but more platforms are moving to pay-for-placement formats, which means you can expect to spend even more money on advertising if you want your content seen. I recommend using your current social media investments to build your email list. Start collecting your followers’ email addresses so you can communicate with them directly. Use what social media investments you have to build your email list.
2) Expecting too much too soon and then giving up.
The Small Business Administration says 30 percent of all start-up small businesses fail within two years, and that number reaches 50 percent within five years. Many small businesses start strong, but then, within months, they’ve failed
The problem? Overblown expectations. They wanted results within a few months. Actually, they needed results within a few months. When that didn’t happen, they bailed.
The solution? Expect a two-year ramp-up period. If that seems impossible, use careful advertising to get the marketing engine warmed up then complement that with as much content as you can afford to create and promote.
3) Not understanding your audience.
If you don’t understand your customers, you might as well donate most of your marketing budget to charity.
Study the hearts and minds and behaviors of your audience. Do this before you define strategy, before you buy advertising and before you create content. Figure out what to say to them, how to say it, and where to say it.
The whole point of your marketing is to reach your audience. You have to KNOW who they are.
4) Not knowing how you’ve attracted your mega-customers.
Call them mega-customers. Call them whales. However you say it, you need to know which marketing tactics and content are bringing in your most valuable customers. The top 20 percent of your customers probably account for at least half your revenue.
5) Doing any big one-time ad campaign.
There are plenty of cool marketing tactics to try. Some of them work great, but most of them don’t – especially if you’ve only got one shot to make them work.
The solution? Test it first with $1,000 or less. If you can’t get this new tactic to work at $1,000, it’s not likely to work at $10,000, either.
6) You aren’t tracking your marketing well enough.
You probably have Google Analytics set up, but are you using it? What are you learning from it?
Most small businesses I talk to don’t have good answers to those questions because they don’t know how this the tool works. Take some time to learn via Google’s free online Analytics Academy.
There’s also a lot of confusion around Google’s pay-per-click advertising platform, AdWords. I love AdWords, and I find it to be a very effective marketing tool. However, many small business simply buy ad space without examining how those ads perform, and that can lead to throwing away a lot of money.
This can be easily fixed. Start by setting up conversion tracking for your ad campaigns. The AdWords system allows you see how effectively your ads lead to customer activity such as phone calls, website purchases, downloads and more. If you aren’t already tracking conversions from your Google AdWords clicks, stop reading this article and go do that right now.
7) You’re trying to do too much.
As small businesses, we’ve got limited resources. We don’t have an entire floor of marketing staff. We’ve usually got one to three people, max.
You can’t do it all. You can’t be on every social platform, publish content everywhere, or try every shiny marketing trick that comes along. Focus on REALLY knowing your audience and using the social media platforms, websites and marketing tools THEY like.
8) You haven’t adjusted your marketing strategy in years.
Marketing evolves fast these days. While I just told you to focus on what works, I also recommend trying a couple new things every year. Given the way marketing is evolving, we’ve got to evolve, too.
Is your business wasting money in any of these areas? If so, it’s time to reassess your marketing plans for the next year and make a few changes.